Shareholders in satellite communications company Inmarsat may seek a private buyer as the prospect of a successful flotation seems unlikely.
The company was originally set for flotation in late 2000, but put its plans on hold in the face of a falling telecommunications market. Last year it reiterated its commitment to an IPO, but only when market conditions improved (Flight International, 9-15 October, 2001).
Just under half of Inmarsat is owned by five companies: BT, France Telecom, Kokusai Denshin Denwa, Lockheed Martin and Telenor of Norway. Many of them are eager to sell. Lockheed Martin, for example, has described its share as "an equity asset...positioned for monetisation".
Inmarsat says that the planned flotation "was naturally the next step in the privatisation process", but adds that it is also considering a private bid: "We are continuing to consider options that would maintain shareholder value."
But the present owners will have difficulty agreeing on a price. Lockheed Martin is the single largest shareholder, with 14%. It acquired a 21% stake with its takeover of Comsat in 2000, and then sold 7%for $164 million later that year. It now values its stake at $270 million, which would value Inmarsat at $1.93 billion. But BT, which owns 7.9%of Inmarsat, values its stake at "less than £50 million [$77 million]", meaning that Inmarsat would be worth only $975 million.
"It's always difficult to value Inmarsat. It's lumped in with the telecoms sector when it's really very different, "says one analyst.
Other satellite operators have suffered badly from the collapse of the telecoms bubble. In the late 1990s, expecting constant rapid growth in demand for broadband internet access and mobile communications, many satellite operators overextended themselves, and are now in serious financial trouble, stuck with too much unprofitable capacity. The result has been bankruptcies, mergers, and falling launch rates and satellite charges.
Inmarsat has been cushioned from the collapse by operating a satellite network providing global satellite communications for land mobile, maritime and aeronautical markets.
The organisation's fourth-generation satellites are being built to provide broadband voice and data services from 2004.
Source: Flight International
